First victim of health care overhaul?

Original Post: Politio

By: SARAH KLIFF



A Virginia-based insurance company says “considerable uncertainties” created by the Democrats’ health care overhaul will force it to close its doors by the end of the year.

The firm, nHealth, appears to be the first to claim that the new law has driven it out of business. “We don’t know what the rules are going to be, and, as a start-up, our investors need certainty,” nHealth CEO and President Paul Kitchen told POLITICO. “The law created so much uncertainty that is beyond our control.”

Last week, in a letter to the company’s 50 or so employees, Executive Vice President James Slabaugh said nHealth has stopped accepting new group customers and will terminate all business by Dec. 31.

“The uncertainties in the regulatory climate coupled with new demands imposed by national health care reforms have made it challenging to sustain the level of sales required to remain viable over the long run,” Slabaugh wrote.

The company’s finger-pointing — first reported by the newspaper Richmond BizSense — must be read with caution: For years, employers and health insurance brokers have struggled to keep pace with steeply rising health care costs.

Asked about nHealth’s decision to shut down, a White House aide said, “It’s difficult to comment on this case without fully evaluating the company in question.”

The blame game — whether health reform can be held responsible for the continuing woes of an already struggling system — will very likely become a familiar plotline as the health overhaul takes effect and political parties vie for control of the narrative.

President Barack Obama dives back into the fray Tuesday, traveling to a senior center in Wheaton, Md., for a national tele-town hall on health care.

NHealth opened for business about 2½ years ago and was named in October 2008 one of the “Greater Richmond Companies to Watch” by a local business group. Kitchen estimates the company has about 100 small-business contracts providing policies to “thousands” of subscribers.

NHealth specializes in high-deductible insurance plans, meant to cover larger medical emergencies, that are paired with health savings accounts, the tax-deductible accounts used to pay for medical expenses.

HSAs have grown dramatically since they were authorized in the 2003 Medicare Prescription Drug Improvement and Modernization Act. There were about 1 million enrollees in 2005. Now there are about 10 million, according to a May 2010 report from the industry group America’s Health Insurance Plans.

HSAs are a favorite of conservative health economists, who see the plans as a way to control costs by leaving spending decisions to individual consumers. Others have criticized the plans as discouraging cost-saving behavior such as preventive care.

And restaurants are not expanding in order to keep under the limits thus denying jobs.

Restaurants pinched by health reform bill
By: Milwaukee Bizjournals

National health care reform is expected to hit the restaurant industry particularly hard, as Milwaukee-area George Webb franchisee Tom Aldridge understands.

It may not have been part of his original agenda, but reform is prompting Aldridge to significantly alter his business plan.

Instead of continuing on a course to grow his George Webb franchise, Aldridge is expecting to sell two of his five restaurants — eliminating 25 employees in the process — to avoid having to provide health insurance for his workers at a pricey cost.

Under the health care bill passed by Congress in March, employers with more than an equivalent of 50 full-time employees are to provide health care coverage to all workers by 2014 or face a fine of $2,000 per uncovered employee.